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Federal Court - Appeals (3). Atkinson v. Commissioner of Competition [review procedure for ex parte orders]
In Atkinson v. Commissioner of Competition (Fed CA, 2026) the Federal Court of Appeal dismissed an appeal, this brought against the Federal Court's decision that "the Commissioner’s right to seek a section 11 [SS: 'Order for oral examination, production or written return'] order did not end with an application before the Competition Tribunal".
Here the court contrasted the application of the FCR R399 provision regarding setting aside an ex parte order, with an FCA s.27 appeal:[4] The procedural question is whether recourse for a person subject to an ex parte order lies in a motion to set aside under rule 399 of the Federal Courts Rules, S.O.R./98-106, in an appeal to this Court under section 27 of the Federal Courts Act, R.S.C. 1985, c. F-7, or both. I see no error in the judge’s consideration of the relationship between rule 399 and rights of appeal under section 27 of the Federal Courts Act and the conclusion that either route is available.
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[13] .... With respect to the burden on the moving party under rule 399, the Federal Court drew on Canada (Commissioner of Competition) v. Canada Tax Reviews Inc., 2021 FC 921 [Canada Tax Reviews], which also dealt with a motion to set aside a section 11 order:[30] The general test for having an Order set aside or varied on a motion under Rule 399(1)(a) is whether the respondent has disclosed a prima facie case why the Order should not have been made. This requires the respondent to provide sufficient facts and law to justify a conclusion in its favour, in the absence of a response from the applicant: Ont. Human Rights Commission v Simpsons-Sears Limited, 1985 CanLII 18 (SCC), [1985] 2 SCR 536 at 558. For Orders issued under section 11 of the Act, this can be achieved by providing sufficient facts and law to justify one of the following conclusions: (i) that the Commissioner did not satisfy the elevated duty of disclosure that applies in such proceedings, (ii) that the Commissioner has not initiated a bona fide inquiry under section 10 of the Act, (iii) that some or all of the information that was ordered to be produced is irrelevant to the Commissioner’s inquiry, or (iv) that some or all of that information would be excessive, disproportionate or unnecessarily burdensome.
[Emphasis consistent with Federal Court Decision at para. 28.] ....
V. Appeal or Motion
[26] The appellants contend that the judge erred in requiring them to have appealed the section 11 order to this Court as opposed to moving under rule 399.
[27] I do not agree with the appellants’ characterization of the reasons of the Federal Court. The judge did not dismiss the appellants’ motion on the basis that they ought to have appealed; the motion failed because the appellants did not establish a prima facie case that the judge ought to reconsider his decision.
[28] Rule 399 and section 27 of the Federal Courts Act serve different purposes. Either recourse, a motion to set aside or an appeal, is open to a party, but they have different procedures, burdens and standards of review.
[29] On a motion under rule 399, the burden is on the moving party to make a prima facie case as to why the order ought not to have been made, and, in an effort to discharge that burden, a party may lead new evidence. On an appeal, in contrast, the Housen standards of review apply and the appellant must demonstrate an error of law or a palpable and overriding error of fact or mixed fact and law in the lower court’s decision(Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235; Canada (Health) v. Elanco Canada Limited, 2021 FCA 191 at paras. 32–33; Export Development Canada v. Canada (Information Commissioner), 2025 FCA 50 at paras. 31–32).
[30] The judge noted that as the appellants did not "“offer any evidence or legal basis that was not already before the Court”", they were, in effect, re-arguing the same issues before the same judge (Federal Court Decision at para. 48). As their principal objection was a purely legal one—that the section 11 power was spent—they could have brought the question to this Court via an appeal of the section 11 order. The choice was theirs to make; a motion to set aside and appeal each come with their own substantive and procedural considerations. However, having led no evidence, the judge correctly characterized the motion as an effort to re-argue a legal point already determined—something, which, as I will explain, is not the purpose of rule 399.
[31] Rule 399 is an important safety valve. The authority of the Court to set aside its own orders is necessary to deal with the case where the court made a decision in the absence of a party or based on misleading or incomplete information. Rule 399(2)(a) confers discretion on the Court to vary or set aside a decision "“by reason of a matter [« faits nouveaux » in the French version] that arose or was discovered subsequent to the making of the order.”" Orders may also be set aside if it is established that the party seeking an ex parte order did not fulfill the obligation to make full disclosure. This is why evidence is admissible on a rule 399 motion.
[32] While the rule serves to guard against unfairness that could arise from an ex parte hearing, its role is not to invite judges to reconsider their decisions.
[33] The principle of finality of judicial decisions means that setting aside a judgment must be based on serious or compelling grounds: Siddiqui v. Canada (Citizenship and Immigration), 2016 FCA 237 at para. 12, citing Collins v. Canada, 2011 FCA 171 at para. 12. That is why the burden on a rule 399 motion, that of establishing a prima facie case, is a high one. In commenting on the text of the predecessor to rule 399, Marceau J.A. noted in C.U.P.W. v. Canada Post Corp., [1987] 3 F.C. 654, 1986 CanLII 6804 (F.C.A.), "“the words used to describe the power reserved in Rule 330 are not consistent with the idea of simply repeating the operation performed by the first judge so as to determine its validity”" (at pp. 660–61). While Marceau J.A. was writing in dissent, the same point was made by Lacombe J.A. for the majority, who noted that a party seeking to set aside an ex parte order needed to show a "“fundamental defect”" in the original decision, such as a finding made in a complete absence of evidence, and could not simply ask the reviewing judge to "“substitute his view of the evidence for that of the Judge who had made the ""ex parte order”": Canada Post at pp. 672–73.
[34] It is in this context that I understand Gascon J.’s comments. The appellants were asking him to revisit his decision on a point of law, already determined. If that is the objective, the proper recourse is to appeal, not to try to convince the motions judge to change their mind. Gascon J. refused to do so, and rightly so.
[35] I flag, however, a reservation with respect to Canada Tax Reviews, which sets out a limited list of grounds that may be available under rule 399(1) to a party who seeks to challenge a section 11 order:(i) that the Commissioner did not satisfy the elevated duty of disclosure that applies in such proceedings, (ii) that the Commissioner has not initiated a bona fide inquiry under section 10 of the Act, (iii) that some or all of the information that was ordered to be produced is irrelevant to the Commissioner’s inquiry, or (iv) that some or all of that information would be excessive, disproportionate or unnecessarily burdensome.
Canada Tax Reviews at para. 30. [36] While these grounds are well-established, I do not think it advisable to consider the list of circumstances that may support setting aside an ex parte order as a closed list in the context of a section 11 order or that there should, more generally, be a closed list.
[37] Ex parte orders are authorized under a great number of statutes, and it is impossible to foresee the mix of facts and law that might support a motion under rule 399, save to say that the circumstances must be exceptional. Ex parte orders are made in intellectual property matters, as is the case with Anton Piller orders and Mareva injunctions, and in contempt proceedings. In motions to set aside default judgment, for example, the criteria differ and require a reasonable explanation for the delay, the existence of a prima facie defence, and diligence in bringing the motion after learning of default judgment (Babis (Domenic Pub) v. Premium Sports Broadcasting Inc., 2013 FCA 288). . 6035558 Canada Inc. v. Unilin Beheer B.V.
In 6035558 Canada Inc. v. Unilin Beheer B.V. (Fed CA, 2026) the Federal Court of Appeal dismissed an appeal, here brought against an order dismissing an earlier appeal of "an order of an Associate Judge of that Court ... granted the respondents leave to serve and file a second amended statement of claim (Amended Claim) pursuant to Rule 75 of the Federal Courts Rules". Here the Associate Judge was sitting in their case management capacity.
Here the court considers the deference (SOR) to be accorded Associate Judge decisions:[3] The Associate Judge, acting in her capacity as Case Management Judge, was satisfied that the amendments should be allowed on the basis that sufficient material facts had been pled to sustain the claim of patent infringement against the proposed individual defendants. The Associate Judge noted that, pursuant to Rule 75, the Court may allow a party to amend a pleading at any stage of the proceeding to determine the real questions in controversy between the parties, provided that allowing the amendment would not result in prejudice that cannot be compensated by costs, and it would serve the interests of justice. The Associate Judge highlighted that the action remained at an early stage.
[4] Pursuant to Rule 51, the appellants then appealed the Associate Judge’s order to a judge of the Federal Court, arguing that the Associate Judge committed at least four reviewable errors. The Federal Court addressed each of the alleged errors and dismissed the motion to appeal.
[5] Orders rendered by Federal Court judges are reviewable under the appellate standard of review. This means that our Court may only intervene if the Federal Court’s refusal to interfere with the Associate Judge’s order was premised on an error of law or a palpable and overriding error of fact or mixed fact and law: Wiseau Studio, LLC v. Harper, 2024 FCA 157 at para. 2, leave to appeal to SCC refused, 41573 (May 1, 2025); Hospira Healthcare Corporation v. Kennedy Institute of Rheumatology, 2016 FCA 215 at paras. 79 and 83–84 [Hospira]. A palpable error is one that is obvious, whereas an overriding error is one that must go to the very core of the outcome of the case: Qualizza v. Canada, 2025 FCA 222 at para. 9. The standard of palpable and overriding error is highly deferential and is not easily met: Ibid; Western Oilfield Equipment Rentals Ltd. v. M-I L.L.C., 2021 FCA 24, at para. 11.
[6] The appellants contend that the Federal Court made three reviewable errors. First, they allege that the Federal Court applied an overly deferential standard of review to the Associate Judge’s order because she was acting as the Case Management Judge.
[7] We disagree. The Federal Court properly identified the correct legal test, being that the order in question should only be reversed if it is incorrect in law or is based on a palpable and overriding error concerning the facts or issues of mixed fact and law. She cited Hospira and subsequent jurisprudence of this Court. She concluded her consideration of the standard of review with the following statement: "“the question is therefore whether the [Associate Judge] erred in law or made a palpable and overriding error in granting the Plaintiffs leave to amend their claim”": Order at para. 14. The correct standard was then referenced throughout her analysis.
[8] The appellants highlight that the Federal Court also noted that one "“should only interfere in a decision made by a case management judge in the clearest case of misuse of judicial discretion given their familiarity with the issues and general expertise”": Order at para. 13. They allege this statement cannot be excised from the reasons and should not have factored into the analysis. The appellants submit that the Federal Court committed a legal error by elevating the standard of review.
[9] Having considered the Order in its entirety, we are not satisfied that the Federal Court committed a reviewable error as alleged. To be very clear, the correct legal test is as set out in Hospira [SS: Hospira Healthcare Corporation v. Kennedy Institute of Rheumatology, 2016 FCA 215]. That is the law.
[10] It is true, however, that there are instances where the Federal Court and our Court have commented on the treatment of decisions rendered by case management judges in the same manner as the Federal Court did in the case at bar. Much of this language stems from older jurisprudence, notably, L’Hirondelle v. Canada, 2001 FCA 338, at para. 11 and Constant v. Canada, 2012 FCA 87, at para. 12 [Constant]. Such cases refer to the latitude given to case management judges to manage cases, in the sense that such judges ought to be afforded "“elbow room”" to manage cases and thus the Court should only interfere in the clearest cases of misuse of judicial discretion.
[11] As recognized by this Court in Hospira, comments referring to the "“elbow room”" given to case management judges, in appropriate contexts, are merely expressions of the deference that is owed to such a judge or associate judge in factually-suffused decisions, absent a reviewable error (at paras. 102–103). Such expressions or reformulations are in essence justifications for why such a highly deferential standard—palpable and overriding error—is appropriate for factually-suffused decisions made in the context of case management. Nevertheless, we recognize that the use of such expressions or reformulations can lend itself to confusion and thus it is best to stick to the language of the test as set out in Hospira.
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